Agility settles US government military supply contract case

Logistics firm Agility has now fully settled criminal and civil cases over allegations it defrauded the US government on a military supply contract.

In the criminal portion of the case, Agility announced earlier that it has agreed to plead to a misdemeanor in connection with a single invoice valued at $551.

In the parallel civil proceedings of the case, the company has agreed to pay $95 million in cash. In addition, Agility and the U.S. government have agreed to mutual releases of all outstanding contract claims related to the food-supply contracts.

The agreement will resolve all legal issues related to these contracts for Agility employees, directors, officers and affiliates. The terms of the settlement are subject to final court approval.

The settlement will allow Agility to resume the pursuit of new US government contracts. Under the terms of the settlement, the US government has agreed to remove Agility and all of its subsidiaries and affiliates from the list of suspended companies on its System for Award Management (SAM) database

Agility chief executive Tarek Sultan said: “The settlement affirms our long-standing view that Agility acted transparently and responsibly as it carried out to near-perfection the extraordinarily complex mission to deliver food and related materials to US troops in an active war zone.”

“Today’s settlement removes uncertainty for investors and lenders, ends costly litigation, and opens a pipeline of potential government and commercial contracting opportunities.

“Agility has a healthy balance sheet and low net debt. The company can meet its obligations under the settlement without jeopardizing its current investments or its future growth. By bringing the case to an end, we have the ability to unlock additional value for shareholders.”

The contracts spanned seven years, involved nearly 200,000 invoices to the US government, and were valued at over $8.6bn.

"Agility settled on terms that preserve and validate the company’s reputation for integrity," the company said.

In 2010, Agility’s contract was given to another firm, Anham, after it was alleged that PWC, as Agility was then called, and others defrauded the US Army out of $60m by knowingly overcharging for fruits and vegetables.

It was also alleged that PWC failed to disclose and pass through rebates and discounts it obtained from its US-based suppliers, as required by its contracts.